Steel and aluminum are getting all the attention these days — and perhaps rightfully so, given the international row over the US’ steel and aluminum tariffs and the subsequent crossfire of counter-tariffs.
But copper, often referred to as “Dr. Copper” for its usefulness as an overall indicator of economic health, is also undergoing important developments.
The LME copper price, however, has been on the downswing for much of June.
Three-month copper reached $7,268/mt as of June 11, but it has been all downhill from there. In the ensuing nearly two weeks, the LME three-month price has plunged 6.4% to $6,801/mt, according to MetalMiner IndX data.
The price, however, seemed to be begin to stabilize last week after closing at a one-month low.
Chinese Prices
Similarly, Copper Futures have dropped in recent weeks.
From June 11-24, China primary cash copper dropped from 53,840 yuan/mt ($8,226.38) to 51,470 yuan/mt ($7864.26), good for a 4.4% decline, according to MetalMiner IndX data.
Labor Talks in Chile
As is always the case with copper, labor negotiations in Chile, the world’s top copper producer, play a key role in the metal’s price.
Earlier this month, in an ongoing dispute at BHP’s Escondida mine, the company responded to a contract proposal from its unionized workers at the mine, Reuters reported.
“The company hopes … to reach a mutually beneficial agreement, and to touch on issues like the bonus and salary increases, which were not addressed in our response,” BHP said in a statement, according to the Reuters report. Per the report, the company must present a final contract offer by July 24.
In the same vein, Reuters reported Monday that workers at Codelco’s Chuquicamata mine are threatening to strike. The mine produced approximately 19% of Codelco’s total output in 2017, according to the report. Again, a strike there would certainly put support under the copper price.
US Dollar
Meanwhile, the US dollar, which is inversely correlated with base metals like copper, picked up steam from June 7-19, in line with the metal’s drop.
However, the US dollar index has tracked back in recent days, dropping from 95.50 as of Thursday to 94.30 late Monday afternoon.
by Fouad Egbaria